Consumers are finally giving their credit cards a break.
A combined measure of how much consumer debt increased for credit cards and other consumer loans (but not mortgages) fell to $11.6 billion in December from $33.1 billion in November, the Federal Reserve reported Tuesday. The drop-off was far greater than the decline to $26 billion that economists had predicted. A chart shows just how steep the fall was.
Borrowing for revolving debt like credit cards fell by more than half to $7.2 billion from $15.2 billion, while nonrevolving debt for things such as student loans and car loans plummeted to $4.4 billion from $17.8 billion. The sharp cutback in new debt matches a rapid decline in consumer spending in the final month of 2022.
“Growth slowed considerably from the month prior, reflecting a weaker-than-normal holiday shopping season and weakening supply of credit,” Shandor Whitcher, an economist at Moody’s Analytics, wrote in a commentary.